Tom DiLorenzo on the Sherman Antitrust Act and myth of monopolies

I was studying antitrust at the time.  And, of course, when I was teaching, I was teaching the Austrian theory of competition, not the perfect competition theory of competition.  And I noticed that every single textbook said that in the late nineteenth century, there was a rampant monopolization of American industry, and that justified the antitrust laws.

I was the very first person to dig up the actual statistics on such things as production and prices of the industries that were accused of being monopolies by the Senate and the House of Representatives in the late 1880s before they passed the Sherman Act.  And I published this article showing that instead of output restriction, there was massive expansion.  These industries were the fastest-growing and most productive industries in America at the time, which is why they were being picked on by their less successful rivals, who got the politicians to pass a law that would hamper them.  The same with prices.  They dropped prices faster than the CPI dropped for ten years prior to the Sherman Act and ten years after the Sherman Act.  The only reason I was the first one to do that is that no one else had asked this question from an Austrian perspective every before.

So if you have Austrian economics and libertarian theory in your educational background, you look at history very differently.

~ Tom DiLorenzo, "The Importance of Human Action To Me," The Misesian, May-June 2024

Andy Kessler on the anti-Big Tech Biden appointees

President Biden appointed three tech-hating progressive pillars of piety to prominent government positions: Lina Khan at the Federal Trade Commission, who wants to break up Amazon ; Tim Wu at the National Economic Council, who has a book denouncing bigness; and Justice Department antitrust nominee Jonathan Kanter, who has represented Yelp and Microsoft accusing Google of anticompetitive behavior.  I don’t think even the Communist Party could stack the deck so well.

~ Andy Kessler, "A Chinese Warning for U.S. Tech," The Wall Street Journal, August 15, 2021

Sheldon Richman on antitrust laws

The argument against antitrust law is that it misconstrues the market.  When free it is not a static condition but a process in perpetual motion, in which entrepreneurs are always trying to profit by better serving customers.  In an unmolested market the threat of potential competition would do as much to keep a single firm on the customers’ side as actual competition.  So quantitative indicators are misleading.  As D. T. Armentano says, high profits in an industry with one or two firms is not a barrier to new competition but an engraved invitation.  Moreover, even a cartel agreement among a few sellers couldn’t prevent “cheating” by parties to increase revenues; nor could it prevent new entrants from taking advantage of the dominant firms’ disregard of consumer welfare.

~ Sheldon Richman, "TGIF" Bust the Conservative 'Trust Busters'," The Libertarian Insitute, April 30, 2021

Stephan Kinsella on regulating Big Tech over political censorship

No, the evil state should not be unleashed on the tech giants just because they are air headed liberal idiots.  No, they should not be subject to antitrust law.  No, they are not "part of the state."  No, their CDA §230 and DMCA copyright safe harbors should not be abolished... 

It's pathetic that these companies are acting so... illiberally.  They probably have more market power than they otherwise would, but for state interventions (like IP law).  But the only just solution is to shame them and build alternatives.

~ Stephan Kinsella, Facebook post, January 14, 2021

Evan Lorenz on competition heating up in Big Tech

On Oct. 20, the U.S. Department of Justice filed a suit against Alphabet [parent company of Google], alleging that the search giants payments to Apple, Inc. to make Google the default search engine contravenes U.S. law. To put the Department's suit in perspective, Alphabet pays Apple an estimated $8 billion to $12 billion per year, a sum equal to between 12% and 18% of Cupertino's operating income. Nearly half of all Google searches originate from Apple devices. This is not a parking ticket. However, there appear to be contigency plans. Two-and-a-half years ago, Apple hired John Giannandrea, Google's head of search.  An Oct. 28 report by the Financial Times found that iOS 14, the latest iPhone operating system, used Apple's home-grown search engine for certain user suggestions.

[...]

As we go to press, Apple trades at 35.6 times trailing earnings and Alphabet at 36.5 times.  The stocks seem priced for everything - except competition.

~ Evan Lorenz, "Comity in Washington," Grant's Interest Rate Observer, November 13, 2020

Max Gulker on how antitrust actions stifle startups

The internet boom two decades ago demonstrated the special importance of startups in high-tech industries. Because the vast majority of startups fail, motivating their creation in the first place requires an especially large pot of gold at the end of the rainbow.

The only statistic you need to know is that among successful startups, 16 times more are bought by larger firms than issue their own IPO. Getting bought is the realistic light at the end of the tunnel for the quintessential computer geek toiling away in their garage. Major antitrust decisions with a chilling effect on big firms buying smaller ones in the tech space calls that path into question.

The FTC’s current course would effectively erect new barriers to entry in countless markets for technology. Such barriers are harmful in any industry; in high tech, they risk destroying the evolutionary process of startups that is a crucial source of growth in 21st-century advanced economies.

~ Max Gulker, "The FTC's Strategy Against Facebook is Bad Economics," American Institute for Economic Research, August 2, 2019

Barron's: DOJ goes after Big Tech even though "none of the companies have traditional monopoly positions"

The Justice Department announced late Tuesday that it has opened a review of “the practices of market-leading online platforms.” The agency didn’t name specific companies, but the wording suggests that it will look into Google parent Alphabet for search, Facebook for social media, and Amazon.com for e-commerce.

[...]

[P]roving consumer harm is a tough task when Facebook’s and Google’s services are mostly free, and Amazon’s e-commerce platform has arguably lowered prices and increased convenience through faster delivery.

In fact, none of the companies have traditional monopoly positions in various markets. EMarketer estimates that Amazon represented 37% of U.S. e-commerce sales in 2018 and 3.5% of total retail sales. The firm also said Google accounted for 50% of U.S. digital-ad spending that year, while Facebook had 22%. Apple’s iPhone had 45% of the U.S. smartphone market, according to eMarketer’s latest data.

~ Tae Kim, "Why Investors Shouldn’t Overreact to the DOJ’s Antitrust Review of Big Tech," Barron's, July 27, 2019

Alvin Toffler on Microsoft and the antitrust suit

I have mixed feelings on Microsoft.  I believe that antitrust suit or no antitrust suit, no monopoly lasts forever.  Technological change will produce challengers to Microsoft just as it has produced challengers to every leading company.  That doesn't mean Microsoft goes up in smoke.  But I think it cannot maintain the degree of power that it has indefinitely, and that is without the lawsuit.

~ Alvin Toffler, "Futurist Makes His Predictions On Technology," Investor's Business Daily, September 17, 1998

Herbert Hoover denies laissez-faire credentials

Those who contended that during the period of my administration our economic system was one of laissez faire have little knowledge of the extent of government regulation. The economic philosophy of laissez faire, or "dog eat dog," had died in the United States forty years before, when Congress passed the Interstate Commerce Commission and the Sherman Anti-Trust Acts.

~ Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency 1920-1933 (London: Hollis and Carter, 1952), p. 300

Ludwig von Mises on antitrust laws

Those politicians, professors and union bosses who curse big business are fighting for a lower standard of living.

~ Ludwig von Mises, Theory and History, p. 147